The economic repercussions of the Russian invasion of Ukraine have perhaps one of their most extreme expressions in the nickel market. The metal, whose global relevance has not started to grow due to its role in the production of batteries for electric cars, faced a growing demand even before the conflict. But that upward pressure reached a paroxysm when Vladimir Putin He launched his army on the attack and put his country, the world’s third largest producer of nickel, in a war with consequences that are difficult to estimate.
The price of nickel continued its climb on Tuesday to reach another record due to the conflict in Ukraine and the fear of a shortage if Russia cannot export its production. The metal, used to produce stainless steel and batteries for electric cars, was priced at USD 101,365 per ton in Europe‘s morning trades. Just one hour after that peak, it fell to USD 82,195, which represents an increase of 70%.
The economic impact of the war in Ukraine is destabilizing stock markets and driving up commodity prices. Although since the beginning of the week the prices of all metals have been rising sharply, that of nickel, of which Russia is a major producer, is especially high.
“Russia is the world’s third largest producer of nickel and the first of primary nickel products, such as refined nickel needed for electric vehicle batteries” (Louvet)
“Russia is the world’s third largest producer of nickel and the first of primary nickel products, such as refined nickel needed for electric vehicle batteries,” he explains. Benjamin LouvetOFI AM analyst to AFP.
“For now, the main metal producers in the country were not affected by the sanctions, but many of the companies in this sector are run by oligarchs close to Vladimir Putin,” he added.
The enormous volatility forced to paralyze the market. The London Metal Exchange (LME) halted nickel trading this morning after prices doubled to a record $100,000 a tonne, fueled by a scramble to cover short positions after Western sanctions threatened supply from one of the world’s top producers, Russia.
Nickel’s rally reflects market panic created by the Russian invasion of Ukraine, a situation that has sent traders into a strong bid for the metal, crucial for making stainless steel and batteries for electric vehicles.
“The LME has made this decision for market organization reasons,” said the London Metal Exchange, one of the world’s largest commodity exchanges, adding that it was considering a multi-day suspension.
“The LME will be actively planning the reopening of the nickel market and will announce its plans to the market as soon as possible,” the statement added.
The London Metal Exchange (LME) halted nickel trading this morning after prices doubled
Three-month nickel on the LME more than doubled on Tuesday to $101,365 a tonne, before the LME halted trading on its electronic systems. Stop trades are a common tool in stock and commodity markets around the world. They are a way of trying to calm the volatility of the price so that the market can assimilate the news that shakes it without generating irrecoverable losses. to market players. Without going any further, the Moscow Stock Exchange has not operated since Monday of last week given the huge variations in share prices that followed the invasion.
Uncertainty caused by the Russian invasion and resulting sanctions added to an already bullish nickel market due to low inventories. Nickel prices have quadrupled since last week on fears of further supply restrictions.
Not only does Russia supply about 10% of the world’s nickel, but Russian company Nornickel is the world’s largest supplier of battery-grade nickel, with 15-20% of global supply, he told Reuters. Dominic O’KaneJPMorgan analyst.
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Source-www.infobae.com